What do I do!? – I wasn’t at fault and their insurer won’t pay a full replacement value

4WDers are a pretty friendly bunch, always ready for a yarn about the latest gear, where they’ve been and where they want to go. We love going to events for this reason – to spend time talking to customers and enthusiasts in general. Sometimes, you come across a story that really opens your eyes.

We met Tom (not his real name) at the National 4X4 Outdoors, Fishing and Boating Expo in Melbourne a few weeks back (see Jackson’s highlights here). Tom’s story is all too common in 4WD circles.  Following being rear-ended in a traffic incident, he was horrified at what he was offered for the now mangled wreck that was his 2014 Hilux SR5.

In his own words, Tom exchanged details with the at-fault party and waited to get a call from their insurer to go through the claim process. In the meantime, he compiled a full list of the accessories and modifications that he had lovingly added so that he could tell the other insurance company how much he had invested – this totalled close to $40,000. When you add this onto the value of an SR5 of that vintage you are looking at a total replacement value of up to $85,000. With this in mind, you can imagine Tom’s utter astonishment to hear that the third party’s insurer was offering a mere $35,000 based on their market value assessment.

He battled it, but unfortunately as the weeks passed Tom realised his arguments were futile and that the other insurer did not have to pay him more than the “market value”. What’s more, if he accepted the offer he couldn’t even buy the vehicle back to salvage some of the accessories! Tom then turned to his insurer and advised them what had happened – their response was no different as their valuation came from the very same data source. They went on further to explain that even though they had most of his accessories and modifications listed on his policy, it did not affect the total sum insured in the event of a total-loss. Devastating news for Tom, but far too common amongst 4WD enthusiast’s. The process is still ongoing for Tom and he is currently in negotiations with both companies, but the early signs indicate that he could be up to $50,000 out of pocket.

Now, I am sure you hear us bang on about our differences on a weekly basis so let’s give some context first and talk about how we value your vehicle. After we determine an agreed or market value for your vehicle (your choice), we then ask you what the value of your non-standard accessories modifications amount to. This value gets added to the vehicle value to form a total sum insured. So in Tom’s case, he could have had an agreed value for the full $85,000 with Club 4X4. With no intention to rub salt into his wounds, I did mention this to him to make sure that he understood the importance of having accessories and modifications covered for their replacement value in black and white, on your certificate of insurance. Unfortunately he has learnt the hard way, but the message needs to spread that there are better options available!

The benefit of having your modifications and accessories covered for an agreed value with Club 4X4 is that in a scenario such as this, you are not at the mercy of another person’s insurer. You won’t need to hear the standard line “I understand that you have spent $80,000 on your fourby, but unfortunately my computer says it is only worth $50,000.” If you were insured by Club 4X4 in this situation, you pay your excess to us directly, get your agreed value paid out and we will take on the task of recovering what we can from the other insurer. In addition to this, we also give you the first rights to salvage the vehicle after it has been written off regardless of its age, so you can hold onto some of those irreplaceable items you spent years acquiring.

The old saying is that bad news spreads quicker than good. The reality is this is the kind of bad news that could cause years of heartache… and all you had to do was get a quote with Club 4X4!

Until next week,

Happy Touring!


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Comments 26

  1. The insurer is legally obligated to compensate for the Ioss Tom incurres at the hamds of their insured. Im more than a bit curious to know how an insurer thinks they have salvage rights to Toms vehicle. He is not insured by them. I have not heard of this before and work with the vast majority of insurers in Australia.

    1. Post

      Hi Matthew – technically yes they’re responsible for compensating the value of the vehicle or repairing it. But each insurer will have a different valuation of a vehicle. This is what makes Club 4X4 so different – no one values your rig the way we do.

      Most will look at Glasses Guide or Redbook. We do too, but we also ask you how much you’ve invested in modifications and accessories and add that value on top.

      With reference to salvage rights – where a vehicle is being written off the insurer has rights to the vehicle. Unless, like us, we give rights to the insured first.

  2. Interesting and very informative, thanks.
    I’d like to review my coverage withe you and consider the reality of the above scenario related to my values.

    I’ll call soon!

    1. Post

      thanks for the thoughts Mark – we are doing our best to educate everyone on the challenges around insurance so hopefully the right decisions can be made. Often you find out about this stuff once the damage is done!

  3. The part about having the modifications/accessories printed black and white is spot on.
    I had to persist with one insurance salesperson about having the mods etc covered. They tried to finalise by saying that “yep you are all covered”. I then had to repeatedly request that I wanted all items mentioned listed on the policy clearly and individually listed. That was when I was told to wait on hold while they spoke to a team leader. Came back and said unfortunately they couldn’t insure me. So they are more than happy to verbally say you are covered but won’t put it in writing.

    1. Post


      Another way to look at it is you sum insured on the certificate of insurance. If the total value there is only reflective of the value of the vehicle, then you’re not properly insured. If the value there recognises the vehicle and modifications, then you are!


  4. Your insurance company should be paying you the agreed value, (assuming you agreed on a value) then they chase the insurer of the vehicle at fault.
    If that’s not the case…..name and shame your insurance company.
    Otherwise take your $40000 (???) worth of accessories off the vehicle, accept the $35000 and you’re only out of pocket $10000……….

    1. Post


      If you’re lodging the claim with your own insurance company, yes – they should pay the full amount on the certificate of insurance.

      The article was actually geared to demonstrate what may happen if you have an accident where you’re not at fault and you’re either dealing with the third party’s insurer, or your own insurer (where you aren’t appropriately covered).

      The key difference is the sum insured – we add modification and accessory value to your vehicle value so youre not out of pocket!

  5. I am with Club4x4 and i had a not at fault accident and i called Club4x4 with them about what the process should be, i was told to lodge my claim against the at fault parties insurance, that way no claim would go on my record in the last 5 years etc.

    When i queried about if my car is written off what payout amount i would get they advised whatever the at faults insurance deemed market value….

    I then prompted the lady with what about the amount i had insured with at Club4x4. She then went all quiet and said, oh but if you lodge it with us it will go on your record.. i reiterated the question and she said if you lodge with Club4x4 and its written off you will be paid out the full insured amount.

    Lady i don’t care if it does go on my record, I’m happy to pay a higher premium to cover all the costs i put into my 4×4.

    I think this is a sneaky trick on Club4x4 part because at no stage did they mention any of this, if i had just gone through with the claim under the instructions from the receptionist with the at fault parties insurance i could be out of pocket thousands of $$.

    Shame on you Club4x4

    1. Post


      There is nothing at all sneaky or underhanded about what you went through at all. It may have been a process that wasn’t handled appropriately but that is all – i will provide the appropriate feedback.

      Our claims handlers are trained to give the claimant, you, the option and explain that if you lodge the claim with us, then it will be marked as a claim that you need to divulge with ANY insurer in the country as it will be centrally notified.

      If you decide to lodge a claim we will gladly handle it for you – but unlike other insurers we always aim to educate and provide you with options so that you can make the best decision for your circumstances.


      1. Thanks Kalen

        Thanks for the feedback and I hope staff layout both options to any callers so there is no misunderstanding that the extra value they insure with Club4x4 will not necessarily be covered if you go down the path of the at fault parties insurance.

        1. Post
  6. “If you were insured by Club 4X4 in this situation, you pay your excess to us directly, get your agreed value paid out and we will take on the task of recovering what we can from the other insurer.”

    Question: I think I know the answer, but does Tom’s Club 4X4 premium get hiked up the following year due to this claim, regardless of the fact he was not at fault? Does it stay at this inflated price forever, or until Tom has another not-at-fault accident and makes a Club 4X4 claim, at which point it’s raised again?

    1. Post

      Hi Kayzer,

      When you lodge a claim with your insurer, ANY insurer, your premium will recognise this the next year. We’ve taken a very open and honest approach to this and have tried to educate the market on what happens in these cases. You may not only get a premium increase, but whenever you apply for new insurance anywhere else you may need to disclose that not-at-fault claim. It goes on your record forever.

      Most insurers wouldn’t go out of there way to explain all of this

      Here is an article we published late last year about Not At Fault claims – it caused quite a stir, but we stand by it as an important piece to educate the market on what may be happening without you knowing


  7. i have just joined CLUB 4X4 after my former insurer put up our insurance but reduced the agreed cost to 12.000 CLUB 4X4 AGREED TO MY INSURANCE of 18.000 including accesories not bad

  8. Kalen, so the high cost of mods hardware can be covered but what about the cist of auto electricians, mechanics and specialists costs to install. The $85k cost you had in the original story, I would guess at keast $10k+ for lnstall and sundry costs. Is there any way to have these also covered in you insured value?

    1. Post

      Hi Matt,

      We always recommend that the cost of labour be factored in when you nominate a value for the accessories or modifications.

      It pay to have the total value to start with. Depending on the circumstances we may negotiate some values depending on overall condition and other factors, but at least you’re starting from a fair base.


  9. Someone hits me and I end up paying a higher premium to replace my vehicle? You guys are great! There needs to be a Royal Commission into the insurance industry to end scams like this!

    1. Post

      Hi John,

      The key is you don’t have to lodge a claim with your insurer. What most insurers will do is not tell you, take your excess and hike your premiums next year.

      What you lodge a claim, you ask your insurer to respond. As such you’ve lodged a claim on your policy.

      A little known fact is that as an insurer you rarely recover all of the costs when claiming recovery from the other insurer. Much less when you insure the way that we do.



  10. It seems that everyone forgets that insurance is a contract of support for the driver in the event of the claim. The insurance company is not responsible for the collision, one or both drivers are. In the case of a rear end crash it is the rear driver who is usually responsible. The fact that his “mate” refuses to fully support him is not the responsibility of the injured driver. In the event of the insurance company failing to pay the full claim, request the balance from the responsible driver. ( He was driving, not the insurance company.) It is his responsibility and he can be forced to pay through legal channels. Where, in the past, I have helped an injured party I have insisted on making the claim directly on the at fault driver. I have only supplied information to the insurance company on a “for reference” basis. This was in another country but regardless of location the at fault driver is responsible for his actions.

  11. Further to that…..

    I had mine insured with a specialist 4WD insurer. I’d done everything right – Accessories & Mods all listed separately and insurance was supposed to be “Market value of base car PLUS accessories & mods”. Policy, coverage and everything else all looked good. Stayed with them for years on that premise too.

    After seeing the ad’s for a while, I finally got off my backside and got a quote from Club 4×4, comparing them with Shannons and checked my current insurer. Yes, I had to do all the photo’s (understandable).

    When I checked and asked the question directly – in the case of a total loss, my current (now old) insurer would have paid out a sum that I would be lucky to find a decent clean example of my rig, let alone all the mods. Some $20,000 odd difference to Club 4×4 !!!

    Now my insurance from Club 4×4 states very clearly the total amount insured.

    Sure, it’s more expensive than the other mob, but I’m much happier and sleep better now! Hopefully I never need it.

    1. Post
  12. Great article, I thought I had my mods covered as listed, will now check if added to value paid out. Great timing as renewal soon due.

  13. Is it recommended to go for the claim with the at fault insurer but if not happy with their write off valuation can I then go through my club 4×4 for my agreed cover amount?

    also can i not make there insurance pay for my club4x4 excess as its their drivers fault on the claim?


    1. Hi Greg,

      Thanks for the message. The whole reason you may go through your insurer even when you are not at fault would be if the other insurer was not offering due compensation, your choice of repairer or any other features that you may have on your own insurance. For this reason you will pay an excess to your insurer to handle the claim on your behalf. If their insurer is offering you everything you need, then you would just use them.

      They will not pay for your excess with Club 4X4 but if we are able to recover the costs from them fully after we pay you out, we may potentially be able to refund your excess paid to us. This comes down to a claim-by-claim basis.

      Hope this helps, Cheers, Jackson.

  14. also when my wife got hit up the bum she rang her insurance and made the claim giving the at fault driver details to them and there was no excess as she was not at fault and her insurance got her a hire car also and then just recouped the hire cost and repair from the other party’s insurance.

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